Buying a Business
Cost to Buy a Business in Middletown
Considering purchasing a company in Middletown, Ohio? You've come to the right place to get statistics and trend data on Middletown, Ohio business-for-sale transactions.
The good news is the folks at BizBuySell.com have made some data available on what it costs to buy a business in Middletown.
BizBuySell.com is the largest online marketplace for business-for-sale transactions. When a business broker in a local city has a listing, the broker will typically post it on BizBuySell.com. They also have many FSBO (for sale by owner) business-for-sale listings.
If you are looking to buy a business in Ohio, peruse the BizBuySell Ohio listings to see the latest business-for-sale listings for Middletown and other Ohio cities.
Business Valuations in Middletown, OH
According to BizBuySell.com, the median asking price for an Middletown business-for-sale listing in Q4 2008, the quarter when they most recently released their data, was $210,000.
That was based on 108 listings in the Cincinnati-Middletown, OH-KY-IN metro area. As such, some of the businesses used to derive the median valuation might be outside of Middletown, but they are in the area and so are likely representative of Middletown business valuations.
Note that this is the median asking price for a business. If you are in the market to buy a company, you may be able to buy an Middletown business for much less. At the same time, some Middletown businesses may cost much more.
Another thing you should know is that this is the asking price for an Middletown business. Typically, when a business owner lists a company for sale, they start with an asking price that is higher than the ultimate sale price. The sale-price-to-asking-price ratio varies considerably but typically might be between 0.85 and 0.90. In other words, a business listed for $100,000 might sell for between $85,000 and $90,000.
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Cincinnati-Middletown, OH-KY-IN metro area for the last 8 quarters.
Revenue Multiples In Middletown, OH
In the Cincinnati-Middletown, OH-KY-IN metro area, companies will usually sell for 0.71 times the selling company's revenues. That was the mean revenue multiple for Q4 2008 in this area of the country.
In other words, a business that has revenues of $200,000 might list for $142,830. Remember, however, that this is simply an average for revenue multiples in Middletown and surrounding communities. Some small businesses will have higher revenue multiples and others will have lower revenue multiples.
Here is how median revenue multiples are moving in the Middletown area, based on BizBuySell.com's quarterly reports.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $417,500 in Q4 2008.
Cash Flow Multiples In Middletown, OH
Another common method to value a business is through cash flow multiples.
For Q4 2008, the average cash flow multiple for listed businesses in the Cincinnati-Middletown, OH-KY-IN metro area was 3.81.
So, a business with cash flows of $120,000 might have an asking price of $456,712. That's if the business fits the area average. Most businesses will not conform to industry- or area averages.
The table below shows how cash flow multiples are trending in the Middletown area, based on BizBuySell.com's quarterly reports.
Flow Multiple
If you are interested in what cash flows are for a business in Middletown, BizBuySell.com found that the median cash flow for Middletown area businesses was $75,562 in Q4 2008.
Things to Consider When Buying a Business in Middletown, OH
Before you start shopping for a business to buy, establish your acquisition criteria. It's important to define the parameters of your search. Include geographic requirements, criteria on the transaction size, and other business attributes that are important to you. Having set criteria will help you demonstrate that you are a thoughtful and committed buyer. It will also streamline your business buying process. This helpful advice on how to buy a business comes from Domenic Rinaldi, managing partner of Chicagoland Sunbelt, a leading business brokerage firm.
Business Valuations for Middletown, OH Businesses
If you have a specific business in mind and want to get a ballpark business valuation, we recommend the BizBuySell.com Business Valuation Tool. You can refine the dataset that generates business valuations to meet your specific needs, and access to the tool is very affordable -- less than $100.
More Information on BizBuySell.com's Quarterly Reports
The BizBuySell Insight Report is a nationally-recognized economic indicator that tracks the health of the U.S. small business economy. If you find this data interesting, be sure to visit BizBuySell.com Insights Report for more information.
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